TMI Blog2019 (6) TMI 1643X X X X Extracts X X X X X X X X Extracts X X X X ..... tracted from his earlier statement. Therefore, there was no basis to make any addition against the assessee. The issue is, therefore, covered by the Order of ITAT, Delhi SMCBench in the case of same assessee for the A.Y. 2011-2012 [ 2019 (4) TMI 1112 - ITAT DELHI] . In view of the above, we set aside the Orders of the authorities below and delete the entire addition. - Decided in favour of assessee. - ITA No. 2822/Del./2018 - - - Dated:- 24-6-2019 - Shri Bhavnesh Saini, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri R.S. Singhvi, C.A. And Shri Satyjeet Goel, C.A. For the Revenue : Shri P.V. Gupta, Sr. D.R. ORDER PER BHAVNESH SAINI, J.M. This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-33, New Delhi, Dated 09.02.2018 for the A.Y. 2013-2014. 2. We have heard the Learned Representatives of both the parties and perused the material available on record. 3. Learned Counsel for the Assessee did not press Ground Nos. 1 and 2 of the appeal regarding reopening of the assessment. The same are dismissed as not pressed. 4. On Ground Nos. 3 to 7, the assessee challenged the addition of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Diamonds Pvt. Ltd., ₹ 5,60,930 3. Kriya Impex Pvt. Ltd., [AADCK1926B] M/s. Bhatia Diamonds Pvt. Ltd., ₹ 6,37,882 4. AVI Exports [ABIPJ5587A] M/s. Bhatia Diamonds Pvt. Ltd., ₹ 20,01,248 Total ₹ 52,63,386 5.1. The A.O, therefore, noted that assessee has introduced undisclosed income of ₹ 52,63,386/- in its books of account through Shri Rajendra Jain group of concerns. The assessee further filed reply before A.O. explaining therein that assessee company had purchased goods from M/s. Arihant Exports and AVI Exports amounting to ₹ 20,63,326/- and ₹ 20,01,248/- respectively (Sl.Nos. 1 and 4). Further, in the reasons the A.O. has mentioned the names of four parties. The A.O. issued letters/notices under section 133(6) of the I.T. Act to all the above four parties. Out of the above four parties, Karnawat Impex Pvt. Ltd., and Kriya Impex Pvt. Ltd., filed their reply denied to have made any transaction with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reproduced as under:- 5. The Assessing Officer has erred on facts and in law forming a negative inference solely on the basis of extracts of statement by third parties without confronting the same to the assessee company and in total disregard to the provisions of law. 2. Brief facts of the case are that assessee has not filed its return of income for the assessment year 2011-12. The case of the assessee was selected under section 147 of the Income Tax Act, 1961 (in short Act ). Statutory notices u/s. 148/143(2)/142(1) of the Act were issued. In response thereto, the assessee filed its return of income on 18.5.2016 declaring NIL income for the AY 2011-12 and the AR of the assessee attended the assessment proceedings from time to time and filed necessary details. Shri Rajendra Jain, Shri Sanjay Choudhary and Shri Dharminchand Jain are some of the entry providers operating in Mumbai, indulged in providing accommodations entries in the nature of bogus sales and unsecured loans. The main allegation against the above mentioned groups were as under:- i) Their concerns are engaged in merely paper transaction. ii) In the name of their numerous concerns, they import rou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erated by Rajendra Jain Group which engaged in business of providing accommodation entry Name of the beneficiary company Amount (Rs.) 1 Arihant Exports (AFLPP5405N) M/s Bhatia Diamonds Pvt. Ltd. ₹ 4,80,001/- 2 Kriya Impex Pvt. Ltd. (AADCK1926b) M/s Bhatia Diamonds Pvt. Ltd. ₹ 2,67,430/- Total ₹ 7,47,431/- 2.2 During the assessment proceedings notices u/s 133(6) was issued on 15.06.2016 for the verification of transaction made by the assessee company for accommodation entries during the financial year 2010-11 relevant AY 2011-12 from the following concerns : S. No. Name of the party Amount 1. M/s Arihant Exports ₹ 4,80,001/- 2. M/s Kriya Impex Pvt. Ltd. ₹ 2,67,430/- 2.3 M/s Kriya Impex Pvt. Ltd. vide his letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajendra Jain Group at C- 805, Oberoi Splendor Building, JVL Road, Andheri (E), Mumbai M/s Arihant Exports, M/s AVI Exports 3nd M/s Karnawat Impex Pvt. Ltd. are also bogus companies and providing bogus accommodation entries only. The statement which are recorded by administering oath are presumed to be carrying truth in view of provisions of section 181 and section 193 of the Indian Penal Code which provides for imprisonment if the false statement is given. When it is so, no one like to be punished knowingly and hence, it is but logical to accept a sworn statement or the statement taken on oath as revealing the truth. Burden to prove the statement as incorrect is on the deponent and in case of failure of the deponent to prove that earlier stated facts were wrong, his earlier statements are sufficient to conclude a matter. Merely because a statement is retracted, it cannot become as involuntarily or unlawfully obtained. For any retraction to be successful in the eyes of law the deponent has to show as to how earlier recorded statements do not state the true facts or that there was coercion, inducement or threat while recording his earlier statements. Retraction was filed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other Authorities. During the course of search and seizure action, statements of Shri Sachin Pareek (Prop, of Arihant Exports, Director of Karnawatlmpex Pvt. Ltd. Moulimanilmpex Pvt. Ltd.), Shri Manish Sushil Jain (Prop. of Kalash Enterprises, Director of M/s Kriya Impex Pvt. Ltd, Karnawatimpex Pvt. Ltd.) and Shri Anoop Y. Jain (Prop, of Aadilmpex and Prop, of M/s AVI Exports) have also been recorded. All the above person in their statement admitted that they were acting as per the directions of their bosses namely Shri Rajendra Jain and Shri Surendra Jain, for which they were getting salary. Hence, it is clear that concerns listed at all the concern are totally controlled and managed by Sh. Rajendra Jain and Sh. Surendra Jain and other directors/partners/proprietors are just name lenders who are actually employees of Sh. Rajendra Jain and Sh. Surendrea Jain. The assessee has claimed that it had conducted proper purchase transactions with the parties - M/s Arihant Exports and M/s AVI Exports but not with the other two i.e. M/s Kriya Impex Pvt. Ltd and M/s Karnawat Impex Pvt. Ltd has also given their submission in response to notice u/s 133(6) of the I.T. Act. However, AO obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y assessing the income of the assessee on the same amount. Against the above addition, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 19.01.2018 has dismissed the appeal of the assessee. Aggrieved with the impugned order dated 19.1.2018, assessee is in appeal before the Tribunal. 3. During the hearing, Ld. counsel for the assessee has submitted that the AO has erred on facts and in law forming a negative inference solely on the basis of extracts of statement by third parties without confronting the same to the assessee company and in total disregard to the provisions of law. He further stated assessee vide ground no. 3 which is at page no. 2 of the impugned order of the Ld. CIT(A), has raised the issue that The AO made additions without giving opportunity of cross examination of the person on the basis of whose alleged statement, the additions was made and submitted that the same was not adjudicated by the ld. CIT(A) and inspite of deciding the same, he has mentioned vide para no. 8.7 at page no. 15 that the AO has given sufficient opportunity to the assessee to present is contention and the appellant has no where mentioned in its submission that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find that assessee has raised ground no. 3 which is at page no. 2 of the impugned order of the Ld. CIT(A), stating therein that The AO made additions without giving opportunity of cross examination of the person on the basis of whose alleged statement, the additions was made . I find that the same issue was not adjudicated by the ld. CIT(A). However, he has mentioned vide para no. 8.7 at page no. 15 that the AO has given sufficient opportunity to the assessee to present is contention and the appellant has no where mentioned in its submission that the AO was ever asked to provide opportunity to it to cross examine the persons whose statements were recorded, which is not tenable. I further find that at page no. 8 of the impugned order of the Ld. CIT(A), the Ld. CIT(A) has reproduced the submission of the assessee by stating that the present appeal is against the additions under section 68 on assessment completed u/s. 148 of the Act of ₹ 747,431/- simply based on the report of investigation without .. doing cross examination of any one .. . I further note that the addition in dispute was made and confirmed merely on the basis of the statement made by Sh. Rajendra Jain on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was denied by the Assessing Officer. The first appellate authority also did not consider it fit to allow crossexamination. This is in gross violation of the principles of natural justice and against the ratio laid down by the Hon'ble Supreme Court in the case of Andaman Timber Vs. CIT Civil Appeal No. 4228 OF 2006 wherein it has been held as under: According to us, not allowing the assessee to crossexamine the witnesses by the Adjudicating Authority though the statements of those witnesses were made the basis of the impugned order is a serious flaw which makes the order nullity inasmuch as it amounted to violation of principles of natural justice because of which the assessee was adversely affected. It is to be borne in mind that the order of the Commissioner was based upon the statements given by the aforesaid two witnesses. Even when the assessee disputed the correctness of the statements and wanted to cross examine, the Adjudicating Authority did not grant this opportunity to the assessee. It would be pertinent to note that in the impugned order passed by the Adjudicating Authority he has specifically mentioned that such an opportunity was sought by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Tribunal, SMC Bench, Delhi in the case of Smt. Jyoti Gupta vs. ITO (Supra) and in vie w of the law settle d by the Hon ble Supreme Court o f India in the case of Andaman Timber vs. C IT (Supra), on identical fact s an d circumstances, the addition in dispute is deleted and the appeal of the assessee is allowed. 7. In the result, the appeal filed by the assessee is allowed. The decision is pronounced on 05/04/2019. Sd/- (H.S. SIDHU) Dated: 05/04/2019 JUDICIAL MEMBER 6.1. Learned Counsel for the Assessee in view of the above facts submitted that assessee has conducted the transaction through invoices which have been confirmed by the parties. The assessee made payment through banking channel which have not been disputed. Therefore, genuineness of the purchases would not have been doubted by the authorities below. He has submitted that the issue is covered by the Order of ITAT, Delhi SMC-Bench in the case of the same assessee (supra). 7. On the other hand, the Ld. D.R. relied upon the Orders of the authorities below and submi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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